The 1930s Great Depression

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The Great Depression happened in 1929-39 and had three major reasons for occurring.

  1. The first reason was because of the over speculation of stocks with borrowed money.
  2. The second was the federal reserve restricted the money supply.
  3. The third reason was because was because of the high tariffs that created unbalanced foreign trade.

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All these reasons added up all together and caused the nation to suffer.The over speculation of stocks involved a lot of considerable risks but offered the chance of large gains especially trading in commodities and stocks. It was supposed to help the market but instead it went downhill.It gave a false impression that the economy was worth more than it really was. When the stock market crashed many Americans panicked.

The crash and run on the banks eventually created unemployment for about 25% of Americans. People had distrust that if they put their money in the bank then they would not see it again. People couldn’t buy many things because they didn’t have the money and if people weren’t buying things then businesses would go down. There was unbalanced foreign trade because of the rise of tariffs and people couldn’t afford it. The Hawley Smoot Tariff was a piece of legislation that was originally intended to help domestic farmers against agricultural imports. This was supported by president Hoover but it was a failure. The republican Hoover did too little too late to stop the great depression.

It was hard to pull through all the obstacles in the way. It wasn’t until after 1939 when world war 2 was happening that military industry helped America get back on its feet. It was under the presidency of FDR. He was elected in 1932 and created a plan which would be known as The New Deal. The New Deal was a start in helping the country out of the depression but not completely. It provided a huge number of programs that were funded by the government so that people would be able to work and earn money in things that they knew how to do well. World War 2 led the nation out of the depression because European nations that went to war needed goods like, tanks, jeeps, airplanes, parachutes, ammunition, and medical equipment. The companies that manufactured wartime goods also created millions of new jobs, which solved the unemployment problem. I believe if it wasn’t for FDR the great depression would have been much worse and would have maybe lasted longer.

http://www.federalreservehistory.org/Period/Essay/10

http://www.biography.com/people/franklin-d-roosevelt-9463381

http://www.newdeal75.org/whatwasit.html